NightBlogger

(MarketWatch)
Stocks from Thailand to Turkey and from India to the Czech Republic plunged into panic mode Friday, forcing trading suspensions on numerous emerging-market exchanges, as a collapse in investor confidence and fears about a global recession amplified selling pressures around the world. Stock exchanges in Iceland, Indonesia and Russia didn’t even open, while steep declines forced trading halts in Thailand, Austria, Romania and Brazil. As the global financial crisis has spread to nearly every corner of the world, many emerging markets have suffered dramatic declines this year, raising questions about their growth prospects.

There has been “equity-market carnage,” said analysts at RBC Capital Markets in a research note. “Panic has taken over as the credit crisis has compounded fears of a long, drawn-out economic recession.” In the debt markets, the EMBI+ spread index soared 31 basis points to 567 basis points, according to data from RBC Capital Markets.

In Eastern Europe, Russian stock markets remained closed. The Czech Republic’s PX stock index fell 15% and Poland’s WIG 20 stock index dropped 8%. Turkey’s IMKB-100 stock index declined 8%.
After dropping sharply earlier in the day, Hungary’s BUX stock index reclaimed some ground to end down 3%. In Romania, the Bucharest Stock Exchange was closed for trading during most of the session. The BET stock index tumbled 10%. “The heavy selling continued in CEE [Central and Eastern Europe], and the markets here were dominated by fear,” said Adrian Ciocoi, Bucharest-based head of research for emerging Europe at Riedel Research Group. “Confidence is pretty much rock-bottom and investor sentiment is low,” Ciocoi said. “The financial markets were knocked down and the white towel is going to be thrown … increasing signs of capitulation.”

In Asia, Japan’s Nikkei and Thailand’s SET indexes led the sharp declines. The SET index in Bangkok ended down 10% after halting trading temporarily due to circuit breakers. India’s Sensex stock index fell 7%. Hong Kong’s Hang Seng index also tumbled 7%, while China’s Shanghai Composite index fell 3.6%. More

US attempts to get Georgia into NATO, coupled with its desire to erect an anti-missile defense shield in Poland and the Czech republic would give it first strike capability towards Russia. Moscow sees this as a national security threat against the sovereignty of Russia. Political economist F William Engdahl believes this is the geopolitical endgame being played out in Georgia. See Video

Moscow is angry about U.S. plans for missile-defense sites in eastern Europe and Izvestia cited a “highly placed” military aviation source as saying, “While they are deploying the anti-missile systems in Poland and the Czech Republic, our long-range strategic aircraft already will be landing in Cuba.” Izvestia said this apparently refers to long-range nuclear-capable bombers. Former Russian Air Force Commander-in-Chief Anatoly Kornukov told Russia’s Interfax news agency Thursday that the country’s “strategic bombers are entitled to use airfields in any country, including Cuba, as long as its leaders do not object.” More

Russia’s cut in oil supplies coincided exactly with US Secretary of State Condoleezza Rice’s visit to sign the radar base deal last Tuesday. As the ink dried on that agreement, which will provide radar control for a US silo of interceptor missiles due to be based in Poland, oil flow through the Druzhba ­ Friendship - pipeline began to ebb. Two days later, Prague was forced to protest after Russia threatened a “military response” to the deal ­ interpreted as retargeting and redeployment of its own missile arsenal. More